Original Medicare – Part A and B – still stands today, but alone it is not enough for most beneficiaries. Many members expand their coverage by enrolling in a Medicare plan. Currently, there are two options available: Medicare Supplement (also known as Medigap) and Medicare Advantage. These plans assist in covering non-covered expenses beneficiaries must pay out-of-pocket like deductibles and co-pays.
Medicare Supplement and Advantage differ greatly and it is important to know these differences. Check out our comparison guide and see which Medicare plan is best for you.
What is Medicare Advantage?
Medicare Advantage refers to Medicare Part C and provides the same benefits as Part A and B, except for hospice care, a service covered by Part A. Under this plan, members would continue paying their Part B premium. Many Advantage plans offer Part D, which covers prescription drugs. This plan offers doctor visits, hospital stays and other health care providers within a network.
Medicare Advantage usually requires co-pays and deductibles. However, unlike Original Medicare, these payments put annual limits on how much you pay out-of-pocket. Once you’ve reached that limit, the plan will cover your medical bills for the remainder of the year. This means you won’t have to pay anymore after reaching the spending limit.
What is Medicare Supplement?
Medicare Supplement or Medigap, is private plan coverage that pays for most of your out-of-pocket costs like co-pays, deductibles, and premiums and picks up where Original Medicare stops. Medicare Supplement has 10 sub-plans in 47 states, while three states—Wisconsin, Minnesota, and Massachusetts have their own customized plans.
The 10 standard Medigap plans are marked by the letters A, B, C, D, F*, G, K, L, M, N. Once enrolled in Medigap, your plan will cover the portion of your bill, once Original Medicare has paid its claims.
*As of Jan. 1, 2020 Medicare Supplement Plans C and F will no longer be made available to beneficiaries who become Medicare-eligible after Dec. 31, 2019. For those who became Medicare-eligible prior to Jan. 1, 2020, Medicare Supplement Plans C and F will remain active and available for future enrollment.
However, Medicare Supplement plans do not cover prescription drugs – that’s where Part D comes in.
BONUS: Do Medicare Supplement plans have networks?
Choosing Medicare Supplement vs. Advantage
|Compare||Medicare Supplement||Medicare Advantage|
|Out-of-pocket costs||$0 – small amounts, premium not included||$3,400 to $6,700 a year in deductibles and co-pays, depending on the plan.|
|Premium||Varies by age and medical history, roughly $150 to $200/month||Varies by plan, $0 to more than $100/ month|
|Networks||Must accept Medicare||HMOs: Plan providers
PPOs: Any provider (larger costs for out-of-network providers)
|Medicare Parts A & B||Most or all Part A & B out-of-pocket costs are covered.||Part A & B benefits covered in place of Original Medicare.|
|Part D, or drug coverage||Not included, must be purchased||Most plans have Part D coverage.|
|Communication with each Plan||Little paperwork, Uses an automatic check to providers||Some paperwork as members pay directly to providers|
|How it Works with the Original||Private supplemental coverage that pays all or most Part A & B out-of-pocket costs.||Private health plan that provides Part A & B benefits directly in place of Original Medicare.|
|Buying Periods||1st 6 months after enrolling in Part B and being 65 years old, as a minimum age.||During first enrollment in Medicare A and B and during yearly enrollment of Oct. 15- Dec. 7|
|Cards Allotted||1. Red, white, and blue Medicare card
2. Medigap card
3. Part D card
|One Medicare Advantage card.|
|Quality information||There are no standardized ratings for Medigap plans.||Star ratings on Medicare.gov
Medicare Advantage quality rankings from NCQA. Has Consumer Reports.
Deciding which plan is best for you depends on a variety of situations. Our licensed agents can recommend a solution that is best for you.
How to use a Medigap Chart
Our clients across the country come to us from a variety of situations. Because of that, the information above is not designed to make a suggestion for you. It is simply highlighting the differences between Medicare Supplement and Medicare Advantage. Our licensed agents only recommend a solution for you once they know what type of coverage would fit you best.